11/24/2008 @ 2:00PM

Billionaire Sex Scandals

Earlier this month, Germany’s richest woman, and one of its most private, shocked the world when she came forward with a torrid tale of a love affair gone terribly wrong.

Susanne Klatten, who owns of 12.5% of BMW, the automaker her late father ran, admitted to having been blackmailed by her lover, Helg Sgarbi. Authorities say Sgarbi and an accomplice secretly videotaped intimate moments of the affair and, beginning in the fall of 2007, threatened to make videos public if she didn’t give them millions of euros.

In January, rather than let herself be extorted, the married mother of three filed a criminal complaint with the Munich prosecutor’s office alleging fraud and blackmail. The investigation, which is ongoing, led to the arrest of the two men, who are now in jail, Sgarbi in Munich and his alleged accomplice in his native Italy. No trial dates have yet been set.

Klatten recently went public with the details, despite the unpleasant public consequences for her. A respected BMW board member, she is a trained economist with an M.B.A. who has ranked among Forbes’ most powerful women in the past. She is also a member of the supervisory board of Altana, a chemicals company she controls and is now trying to take private in a $1.2 billion deal. Yet she was duped by a man whose intentions were allegedly criminal from the outset.

Affairs always have the potential to damage people’s reputations, not to mention their marriages. But for the rich and powerful like Klatten, the stakes are much higher–putting careers, companies and fortunes at risk.

One of the world’s most eligible bachelors, Russian metals billionaire Mikhail Prokhorov, was detained in the French ski resort of Courchevel in January 2007 after police raided his hotel on suspicion of prostitution. Prokhorov, who said the women were models and his guests, was held for four days and released without being charged.

Time-share tycoon David Siegel, whose net worth briefly touched $1 billion at the peak of the real estate market, was recently ordered to pay $610,000 in damages to ex-employee Dawn Myers over battery charges. Myers sued Siegel, claiming constant advances and groping and alleging that Siegel offered her $1 million for sex. He didn’t apparently get any, but he could still have quite a bill to pay. Siegel is appealing the verdict.

Perhaps the most astonishing story of all involves Henry T. Nicholas, former chief executive of semiconductor firm
Broadcom
. A colorful civil suit claimed Nicholas built a secret “sex cave” under his California home to host drug- and prostitution-fueled parties.

A subsequent 2008 indictment from the U.S. District Court in Santa Ana, Calif., charges Nicholas with conspiracy to distribute cocaine, ecstasy and speed, and alleges that Nicholas had hired prostitutes for himself and clients and supplied the prostitutes with drugs. The trial begins in 2009.